There comes a time in a business’s lifecycle when optimization becomes extremely important. Especially in businesses with a large production or service component. In many cases, the state of the income statement rests on throughput time, resource utilization, capacity utilization, supply chain optimization, and accurate forecasting. To tackle the above areas, most businesses inform their strategy using a discipline called Process Improvement.
Process Improvement is a systematic approach by an organization and its stakeholders to evaluate current business processes. Using a mixture of observation, data collection, and strategic analysis, process improvement owners look to identify opportunities for improvement that align with the business’s overall strategic goals and objectives.
Notice the focus on alignment with strategy.
Process improvement is more than a simple exercise to fix problems within a business. That’s what managers are for. Process Improvement is a deeply strategic endeavor that aims to leverage an understanding of existing business processes to help the organization reach a future state.
Process Improvement is not Outcome Improvement
The goal of process improvement is to avoid topical solutions to the problems. It is the pursuit to identify why a process is not operating at peak optimization and fix it. It’s OK that you understand that 10% of your newly released computers will fail due to a faulty printed circuit board. What’s BETTER is that you understand the reason for this 10% failure rate is a defective design in the etched copper sheets of those printed circuit boards. What’s BEST is that you know the defective design stems from a faulty printing machine that has missed regular service for the last three months.
The success of process improvement lies in the identification of the root problem. Improved outcomes will come.
This is the fundamental principle behind Sakichi Toyoda’s 5 Whys of Process Improvement. Toyota was the birthplace and testing ground for Kaizen, known today as Continuous Improvement (a sophisticated version of Process Improvement). Best characterized by Toyota’s former executive vice president Taiichi Ohno when he said, “The root cause of any problem is the key to a lasting solution,” the 5 Whys of Process Improvement are designed to eliminate the possibility of any long-term, recurring issues.
Using the Five Whys to Drive Strategy
The 5 Whys technique is actually quite simple to execute. After you identify a problem, go directly to the source and ask, “Why” five times, consecutively, until you get to the root issue. Focus on the data, both measurable and empirical observations. Car won’t start? Use the 5 Whys:
The vehicle will not start. (the problem)
- Why? – The battery is dead. (first why)
- Why? – The alternator is not functioning. (second why)
- Why? – The alternator belt has broken. (third why)
- Why? – The alternator belt was well beyond its useful service life and not replaced. (fourth why)
- Why? – The vehicle was not maintained according to the recommended service schedule. (fifth why, a root cause)
As you can see, if you had stopped at first you would have simply replaced the battery and continued to drive the car as if the problem was fixed. But inevitably, the battery would die again, costing you time and additional resources. Simply put, if your strategic objective was to have a functioning car, replacing the battery would do very little to help you accomplish your goal.
Now, let’s put the previous example of your faulty printed circuit boards into context. Imagine one of the strategic priorities of your new product release is to keep warranty claims between 5%-8%. With a guaranteed failure rate of 10% of your printed circuit boards, this objective would be impossible to accomplish without intervention. Specifically, you need your service team to repair the defective copper etching machine and keep it serviced on a regular schedule moving forward. Get your service team back on track, and you will accomplish your warranty goals.
And that’s exactly what AchieveIt is designed to do. Give you real-time access to all your data about existing processes and workflows so you can do an audit and undertake the “5 Whys.” No more bouncing between Excel spreadsheets and the production floor to figure out what happened. All the data and context you need are housed in the Results Management system. Curious how? Set up a demonstration with an AchieveIt representative to learn about how to enable operational excellence in your organization.